CrossLink Tax Resource Center

Tax Resource Center



Preparer Security and Tax Identity Theft

This page is designed to give tax preparers the information they need to meet their security obligations and to improve their defenses against tax related identity theft which includes safeguarding their computer systems from cybercriminals. It will also let preparers know the latest ways identity thieves are attempting to obtain personal information from individuals.

Cybercriminals continue to step up their attacks on tax preparers. Therefore preparers need to take steps to protect their client’s data and their computer networks from these threats.

It is important to note that tax preparers are required by federal law Gramm-Leach-Bliley Act of 1999) to create and maintain a written data security plan. The Federal Trade Commission administers this law and created a Safeguards Rule to administer it.

Just to give you an idea the extent of the threat to preparers during last year’s filing season the IRS received five to seven reports per week from tax firms that had experienced a data theft. Through early November 2018, the IRS received 234 reports for the year. This was a 29 percent increase from 2017. These are just the tax firms that reported to the IRS, which means that there were probably hundreds more tax practitioners who also experienced data theft during 2018.

Here are basic security steps that preparers should take:

  • Learn to recognized phishing emails. Never open a link or any attachment from a suspicious email.

    For more information see:

  • Create Better and Stronger Passwords
    All preparers should review the new, stronger password guidance for all of their online accounts.

    This new guidance suggests using a passphrase such as a favorite line from a movie or a series of associated words rather than using a traditional password.

    For more details on this guidance see:

  • Review internal controls
    • Install anti-malware/anti-virus security software on all devices (laptops, desktops, routers, tablets, and phones) and keep software set to automatically update.
    • Encrypt all sensitive files/emails.
    • Back up sensitive data to a safe and secure external source not connected to a network.
    • Wipe clean and destroy old computer hard drives and printers that contain sensitive data.
    • Limit access to taxpayer data to individuals that need to know.
    • Check IRS e-Services account weekly for number of returns filed with EFIN.
  • Report any data theft or data loss to appropriate IRS Stakeholder Liaison

Additional Links for More Information on Identity Theft and Preparer Security

Recent Tax Updates

IRS Identity Theft Resources
February 19, 2020

Kiddie Tax Change and Form 8615
February 12, 2020

IRS Expands Their Identity Protection PIN (IP PIN) Program
January 23, 2020

2019 Federal Return and the Affordable Care Act
January 3, 2020

Extender and Disaster Tax Relief Provisions Included in the 2020 Consolidated Appropriations Legislation
December 27, 2019

Reminder of 2019 Federal Tax Changes
December 11, 2019

Additional Updates
© 2020 CrossLink Professional Tax Solutions, LLC. All rights reserved. Terms and conditions, features, support, pricing, and service options subject to change without notice.